ICRA feels Delhi EV Policy 2020 beneficial in long-term for e-vehicles
Date: 18 Aug 2020
Ratings has said that the recent Electric Vehicle (EVs) Policy 2020, finalised
by the Government of National Capital Territory (NCT) of Delhi augers well for
the overall development of the EV industry.
The policy seeks to drive rapid adoption of battery electric vehicles
(BEVs) with the goal of reducing air pollution in the Nation’s Capital.
It offers subsidies, waivers, and incentives
on purchase of EVs on one hand and dis-incentivises use of conventional viz.
Internal Combustion Engine (ICE) based vehicles on the other. The incentives
would be offered across segments like electric two wheelers (e-2W), e-rickshaws
(3W), goods carriers, electric cars, and buses and would be incremental to
those offered under the FAME-II Scheme.
Dewan, Vice President, ICRA says, “ We believe that the Policy holds multiple
attractive propositions for the potential e-2W customers. The concern for
deteriorating air pollution conditions in the national capital had already been
gaining momentum for past many years. With a progressive EV Policy in place,
the 2W consumers will be able to contribute towards alleviating the situation
while benefiting from the lower upfront cost as well as total cost of 2W
ownership. The high upfront cost of the e-2W vis-à-vis conventional 2Ws has
been one of the main hindrance for faster e-2W penetration, which will get
addressed through the attractive demand incentives under the Policy. While
scrappage incentive is first of its kind in an EV policy, industry response to
the requirement of matching participation by OEMs/dealers and de-registration
of conventional 2W remains to be seen.”
2W are the dominant mode of commute in India and with the ongoing pandemic, the
preference for personal vehicle is expected to increase further. The subsidies
and incentives offered under the scheme for retail consumers and manufacturers
could therefore give a long-needed push for faster EV penetration and
development of this ecosystem in New Delhi. As per ICRA, coupled with the
FAME-II incentives, the upfront e-2W prices would become 25-30% lower than
conventional 2Ws (for basic models) thereby proving to be a catalyst for
accelerated e-2W penetration.